FRANKFORT — Gov. Matt Bevin’s budget proposal will be felt by students, faculty and staff at the University of Kentucky if the governor’s proposed cuts are enacted by the General Assembly, UK President Eli Capilouto told lawmakers on the House Budget Review Subcommittee on Postsecondary Education Thursday.

Capilouto challenged lawmakers to think of the university as “an economic engine that deserves more investment, not less.” He noted the institution’s work in cancer research and substance abuse treatment, and he said a UK entomologist, Grayson Brown, will travel to Brazil and work to end the spread of the Zika virus.

“Make no mistake about it: Every student, every employee, faculty, staff, everybody will feel it,” Capilouto said. “There’s no way around it. We can’t protect any part, any part of our campus in the face of these draconian cuts.”

Bevin’s biennial spending plan would cut university budgets by 4.5 percent in the current fiscal year and 9 percent over the following two years.

Capilouto said the state has already reduced UK’s annual appropriation to $55 million less than it was in 2008, most of which has been made up in tuition increases totaling about $128 million dollars and $93 million in enrollment growth. Bevin’s budget proposal would cut another $13 million this year and $25 million in fiscal year 2017, he said.

But Capiluto couldn’t say exactly how UK would handle Bevin’s proposed cuts, only saying the budget reductions would create “upward pressure on tuition” and make staff retention “difficult.”

“I wouldn’t want to say today what I thought that would exactly be because we would, again as we do every year, look for every efficiency that we can find, but I notice we pull lots of rabbits out of the hat over the last few years,” he said, “and I don’t know how many rabbits we have left.”

“There’s not a corner of our campus that wouldn’t be touched,” he continued.

Capilouto also expressed concerns with Bevin’s proposal to enact a performance-based funding model for a third of state appropriations for higher education in fiscal year 2018, which would amount to $85 million for UK.

Rep. Arnold Simpson, chairman of the budget review subcommittee, said the lack of specifics on outcomes-based funding troubled him, and House Minority Whip Jim DeCesare said that might ultimately doom the proposal for now.

“I don’t want to speak for this whole committee, but I think it’s safe to say that as of right now the performance-based is off the table,” said DeCesare, R-Bowling Green. “Without a model, how can we have performance-based funding, and it’s going to be hard to plan ahead without that model to use in the future.”

“We’re all concerned,” he added. “We all realize that this is going to be a long process.”

Bevin, however, said starting at a third of outcomes-based funding for higher education must be included in fiscal year 2018, allowing lawmakers and stakeholders to reach a resolution by then. Legislative leaders also said they have no qualms with that part of the governor’s spending proposal.

“What I’ve called for in this budget is what I intend to see in place, including outcomes-based funding,” he said. “I will not sign a budget that does not include a move toward outcomes-based funding.”

Bevin also said he would not budge on his spending reductions, but he would give public universities time to absorb this year’s cuts into the biennium.

“You know the numbers that you are going to receive less in funding,” he said at a press conference outside his Capitol office on Thursday. “Use those numbers to basically accrue this over the course of 30 months. So we will be flexible and work with people to ensure that this is as digestible as possible, but the expectation that people are going to have to sacrifice collectively across the board is still in place.

“We do not have an alternative. We’ve been left with a financial mess the likes of which gives us no alternative. None.”

Speaking to reporters after the House budget review subcommittee meeting, Capilouto said he has shared his concerns with elected officials, including Bevin.

But he declined to speculate on whether a final budget will include performance-based funding for higher education.

“Since I arrived in Kentucky I understand you’re supposed to know how to play the odds, at least with horses,” Capilouto said. “But I’m not prepared to do that today.”

Senate President Robert Stivers, R-Manchester, said he believes the Senate will implement outcomes-based funding for postsecondary schools in its version of the budget.

“We cannot afford to continue to have students graduate with large amounts of debt without good likelihood of employability, so we will need and we need to set criteria based on recruitment, retention and employability for both (the Kentucky Community and Technical College System) and those traditional postsecondary education facilities such as Western and UK,” he said.

House Speaker Greg Stumbo, D-Prestonsburg, said he too supports performance-based funding for universities, but he also feels that lawmakers should have a more definite proposal in mind before codifying the budget into law.

“States are moving toward doing some sort of performance-based, outcome-based funding formula for higher education, and I don’t have a problem with that,” he said.

Poking fun at his past attempts to make the University of Pikeville a public institution, Stumbo added, “Of course I don’t have a university so why would I?”

For those who are in the state’s public education system, Rep. Derrick Graham offered some advice.

“This is the time not to be complacent, but to be engaged and active and to let us know here in Frankfort as well as the administration how important it is, higher education as well as K-12,” said Graham, a Frankfort Democrat who chairs the House Education Committee.

CORRECTION: A previous version of this report identified proposed spending cuts totaling 13.5 percent. The 4.5 percent spending reduction in the current fiscal year is not cumulative with the 9 percent cuts recommended by Bevin in fiscal years 2017 and 2018, according to Bevin spokeswoman Jessica Ditto.

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.